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The IRS has released the final Form 1098-VLI along with accompanying instructions, providing long-awaited clarity for credit unions preparing to comply with the new vehicle loan interest reporting requirements.
The reporting requirements stem from the federal car loan interest deduction enacted in 2025. Under the law, certain taxpayers may deduct up to $10,000 in qualified passenger vehicle loan interest. Lenders that receive at least $600 in interest on a specified passenger vehicle loan (SPVL) during a calendar year are subject to new information reporting requirements. The $600 threshold applies separately to each qualifying loan.
What Credit Unions Need to Know
Form 1098-VLI will be used to report required information related to qualifying vehicle loans, including:
- Vehicle loan interest received by the lender;
- Vehicle year, make, model, and VIN;
- Loan origination and, when applicable, acquisition date;
- Outstanding principal; and
- Information related to the vehicle’s original use and final assembly in the United States.
The reporting requirements apply to interest received during calendar years 2025 through 2028.
The IRS has also finalized regulations implementing the new deduction and reporting requirements. The final regulations take effect November 9, 2026, and include several changes advocated for by America’s Credit Unions during the rulemaking process.
Resources for Credit Unions
Credit unions should review the final Form 1098-VLI and instructions and America’s Credit Unions’ final rule summary as they prepare to implement the new reporting requirements.
Helpful Links
- IRS Form 1098-VLI
- IRS Instructions for Form 1098-VLI
- America’s Credit Unions: Final Rule Summary
- America’s Credit Unions: IRS Releases Car Loan Interest Deduction Form
The League will continue to monitor implementation guidance and share additional information as it becomes available. If you have any questions or comments, please email Jared Gay at jgay@mainecul.org.